The headline is a bit misleading - or at least gives the wrong impression. He isn't eliminating assistance programs for the poor, just block granting it to states to come up with something more effective.
So they'll continue misusing block grant TANF funds to fill budget holes, but now with even more federal tax dollars meant to help the poor! Gee, how could that go wrong?
That's what I'm thinking (minus the mocking tone). States shouldn't be trusted with federal money at all. If they want control over it, let them come up with the money themselves. As bad as Congress is with money, it's not as bad as Blagojevich.